Low molecular weight (LMW) GTP-binding proteins, including ADP-ribosylation factors (ARFs, cofactors for in vitro cholera toxin-catalyzed ADP- ribosylation), are localized in the protein secretory pathway and are thought to function by cycling between cytosol and membranes. Although purified predominately as a cytosolic protein, ARF associates with membrane fractions in the presence of non-hydrolyzable GTP-analogues. Fatty acylation of LMW GTP-binding proteins has been shown to be important for membrane attachment. In contrast to other LMW GTP-binding proteins (e.g., ras), which are post-translationally modified at their C-termini (e.g., polyisoprenylation, palmitoylation), ARF is co-translationally myristoylated at its N-terminus. We hypothesized that N-terminal myristoylation of ARF, as shown for pp60v-src, may be important for membrane attachment. To investigate the role of N-terminal myristoylation, recombinant ARF was expressed in a bacterial expression system which lacks the enzymatic activity necessary for myristoylation. Myristoylated ARF was prepared by co-expression with the gene encoding yeast myristoly- CoA:protein N-myristoyltransferase (NMT). Analysis of the recombinant ARFs (myristoylated and non-myristoylated) indicated that the recombinant proteins exhibited similar biochemical activity as measured by GTP displacement and in vitro activation of cholera toxin-catalyzed ADP- ribosylagmatine formation. In an in vitro translocation assay, however, myristoylated ARF 5 demonstrated a temperature- and GTP-dependent association with Golgi, whereas non-myristoylated ARF did not translocate to Golgi under any of the experimental conditions. In addition, using three different concentrations of Golgi, myristoylated ARF 5 displayed saturable binding to the Golgi suggesting that it interacts with a specific protein target. These data indicate that myristoylation is necessary, though not sufficient, for membrane attachment and are consistent with a function in which ARF cycles between soluble and membrane compartments in vivo.